Monopoly Regulation and Fair Trade Act

By KOREAN LAW CENTER

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• Language: English
• Publisher: KOREAN LAW CENTER
• Release date: Sep 5, 2022
• ISBN: 9788967843793

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1666156963454_0

The code of KOREAN LAW 10

MONOPOLY REGULATION AND FAIR TRADE ACT

Park, Hwiyong

MONOPOLY REGULATION AND FAIR TRADE ACT

[Enforcement Date 12. Aug, 2020.] [Act No.16998, 11. Feb, 2020., Amendment by Other Act]

CHAPTER I GENERAL PROVISIONS

Article 1 (Purpose)

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he purposes of this Act are to promote fair and free competition, to encourage thereby creative business activities, to protect consumers, and to strive for balanced development of the national economy, by preventing business entities from abusing their market-dominant positions and any excessive concentration of economic power and by regulating illegal cartel conduct and unfair trade practices.

Article 2 (Definitions)

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he terms used in this Act are defined as follows:  

1. The term business entity means an entity that engages in manufacturing business, service business, or any other business. Any executive officer, employee, agent, or any other person who acts for the benefit of a business entity shall be deemed a business entity in the application of the provisions pertaining to trade associations;

1-2. The term holding company means a company the main business of which is to control the business activities of a domestic company by holding the shares (including equities; hereinafter the same shall apply) in the domestic company and total assets of which are not less than or equal to the amount prescribed by Presidential Decree. In such cases, standards for the main business shall be prescribed by Presidential Decree;

1-3. The term subsidiary means a domestic company the business of which is controlled by a holding company that satisfies the conditions prescribed by Presidential Decree;

1-4. The term second-tier subsidiary means a domestic company the business of which is controlled by a subsidiary that satisfies the conditions prescribed by Presidential Decree;

2. The term business group means a group of companies the business of which is substantially controlled by the same person according to the criteria prescribed by Presidential Decree as classified below:

(a) Where the same person is a company, a group comprised of such person and one or more companies controlled by that person;

(b) Where the same person is not a company, a group comprised of two or more companies controlled by that person;

3. The term affiliate means where two or more companies belong to the same business group, each company is called an affiliate of the others;

3-2. The term shareholding in an affiliate means an act by which a member company of a business group acquires or holds the shares of an affiliate;

3-3. The term company having a shareholding in an affiliate means an affiliate that acquires or holds shares of another affiliate by having a shareholding in that affiliate;

3-4. The term issuing company means an affiliate that issues shares acquired or held by a company that has a shareholding in that affiliate;

3-5. The term circular shareholding means a relationship in which affiliates are interconnected by establishing a chain of not less than three shareholdings, acting both as a company having a shareholding in an affiliate and an issuing company;

3-6. The term group of circular shareholding companies means a group of affiliates in a circular shareholding relationship, among member companies of a business group;

3-7. The term debt guarantee means a guarantee provided by a member company of a business group to a domestic affiliate in connection with credits granted by any of the following domestic financial institutions:

(a) A bank under the Banking Act;

(b) The Korea Development Bank under the Korea Development Bank Act;

(c) The Export-Import Bank of Korea under the Export-Import Bank of Korea Act;

(d) The Industrial Bank of Korea under the Industrial Bank of Korea Act;

(e) An insurance company under the Insurance Business Act;

(f) An investment trader, an investment broker, or a merchant bank under the Financial Investment Services and Capital Markets Act;

(g) Any other financial institution prescribed by Presidential Decree;

4. The term trade association means an association or a federation that is organized by two or more business entities to increase their common interests, regardless of its form;

5. The term executive officer means a director, a representative director, a general partner, an auditor, or a person in a similar position, or a commercial employer, such as a manager, who is capable of conducting general business of the main or branch office;

6. The term practice of resale price maintenance means an act whereby a business entity forces a business entity, which is the other party to a transaction, or other business entity in each stage of transaction to sell goods or to provide services at a price specified by the first-mentioned business entity, or making a transaction under an agreement or binding terms and conditions thereon for such purpose in the transaction of such goods or services;

7. The term market-dominant business entity means a business entity, which is a supplier or customer in a particular business area, in a position to determine, maintain, or change the price, quantity, quality, or other terms and conditions of transactions of specific goods or services either alone or together with other business entities. In deciding whether a business entity is a market-dominant business entity, its market share, whether and to what extent any barriers to enter a market exist, and the relative scale of competitors shall be comprehensively taken into account;

8. The term particular business area means an area in which any competitive relationship exists or may exist, by the subject, stage, or geographical area of a trade;

8-2. The term practices substantially restricting competition means practices which affect or threaten to affect the determination of price, quantity, quality, or other terms or conditions of transactions by intent of a certain business entity or a trade association, because of reduced competition in a particular business area;

9. The term credit means any loan and guarantee or assumption of company obligation by domestic financial institutions;

10. The term financial business or insurance business means financial business or insurance business categorized according to the Korean Standard Industrial Classification that is publicly notified by the Commissioner of the National Statistical Office pursuant to Article 22 (1) of the Statistics Act: Provided, That a general holding company referred to in Article 8-2 (2) 5 shall not be construed as a company engaging in financial business or insurance business.

Article 2-2 (Application to Overseas Acts)

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his Act shall also apply to acts done outside Korea, if such acts affect the domestic market.

[This Article Newly Inserted by Act No. 7315, Dec. 31, 2004]

CHAPTER II PROHIBITION ON ABUSE OF MARKET-DOMINANT POSITION

Article 3 (Remedies for Monopoly or Oligopoly in Market Structures)

(1) The Fair Trade Commission shall establish and implement action plans to promote competition in markets in which monopoly or oligopoly situations have continued over an extended period in relation to supply or demand of specific goods or services.

(2) The Fair Trade Commission may present its opinions to the heads of the relevant administrative agencies about the introduction of competition or other measures necessary to improve market structures, where necessary to promote the action plans referred to in paragraph (1) .

(3) The Fair Trade Commission shall survey the market structures and publish survey findings in order to establish and promote the action plans referred to in paragraph (1) .  

(4) The Fair Trade Commission may request business entities to submit data necessary to survey the market structures and to publish survey findings pursuant to paragraph (3) .  

(5) The Fair Trade Commission may entrust the business affairs provided for in paragraphs (3) and (4) to other agencies, as prescribed by Presidential Decree.  

[This Article Newly Inserted by Act No. 5235, Dec. 30, 1996]

Article 3-2 (Prohibition on Abuse of Market-Dominant Position)

(1) No market-dominant business entity shall engage in any of the following practices (hereinafter referred to as abusive practices) :  

1. Unfairly determining, maintaining, or changing the price of goods or services (hereinafter referred to as price);

2. Unfairly controlling the sale of goods or the